The so-called 'Effort Sharing' Decision concerns the reduction of greenhouse gas emissions by Member States of emissions from sources not covered under the EU ETS Directive (2003/87/EC). The effort of each Member State to contribute to meeting the Community’s greenhouse gas emission reduction commitment for 2020 through limiting greenhouse gas emissions from sources outside the EU ETS should be determined in relation to the level of its 2005 greenhouse gas emissions, which is the latest available verified greenhouse gas emissions data.  Effort sharing is based on the idea of solidarity between Member States and the need for sustainable economic growth accross the Community.

Emission reductions

Member States with relatively high per capita GSP will need to reduce their GHG emissions compared to 1995 levels, and those with low per capita GDP may increase their emissions. To further ensure a fair contribution of each Member State to the implementation of the Community’s independent commitment to achieve at least a 20% reduction of greenhouse gas emissions by 2020 compared to 1990, no country should be required to reduce its greenhouse gas emissions in 2020 to more than 20% below 2005 levels and no country should be allowed to increase its greenhouse gas emissions in 2020 to more than 20% above 2005 levels.

The Effort Sharing Decision addresses the sectors that do not come under the EU ETS, such as buildings and road transport. For the latter, many of the important decisions will be made at Member State level. Individual EU governments will introduce policies and measures to lower emissions such as traffic management, shifts away from carbon-based transport, taxation regimes, the promotion of public transport, biofuels, urban and transport planning, improved standards for the construction industry, the promotion of adequate insulation, more efficient heating systems, and renewable energy for heating. Measures to reduce and recycle waste streams can also have a significant impact on GHG emissions.

A number of important EU-wide measures will also help Member States to reduce emissions. The recently proposed regulation on CO2 and cars for example, requiring manufacturers to improve the CO2 efficiency of new cars by 19% by 2012, will help Member States meet their national targets. New efficiency standards for boilers and water heaters, together with adequate labelling systems to inform consumers, could also help deliver major emissions reductions in buildings.

Effort-Sharing is also promoting cost-effectiveness through flexibility and integration to the Kyoto Protocol. It introduces flexibility by allowing the use of certified emission reductions resulting from clean development mechanism projects under Article 12 of the Protocol and resulting from emission reduction activities in third countries to implement this effort. It allows the use of certified emission reductions resulting from the Kyoto flexible mechanism, the Clean Development Mechanism and resulting from emission reduction activities in third countries to implement this effort. The use of these credits should be consistent with the EU’s goal of generating 20% of its energy from renewable sources by 2020, promoting the EU’s energy security and promoting innovation and the EU’s competitiveness.

The new guidelines for State aid in the area of environment that are also being adopted as part of the package will increase the ability of Member States to implement such measures, while avoiding distortions of competition in the internal market. 

A group of Eastern European countries have recently put their contribution to the efforts to reduce GHG into question and challenged the baseline year for the calculations of the emissions reductions. Hungary, Bulgaria, Estonia, Latvia, Lithuania, Romania and Slovakia are questioning the reference year 2005 chosen by the Commission to calculate how each of the 27 EU member states will contribute to the EU's promised 20% cut in greenhouse gas emissions.